In a historic move that sets a precedent for decentralized autonomous organizations (DAOs), 1inch DAO, the entity behind 1inch Network, has voted to secure “legal advisory services” from STORM Partners. Notably, this decision comes amid increasing regulatory scrutiny of the cryptocurrency and decentralized finance (DeFi) sectors.
1inch DAO votes to onboard STORM partners for legal advisory services
Following the vote finished On January 9 – with overwhelming support from the 1inch community – holders decided to join STORM Partners. This marks an important step forward in the DAO’s efforts to navigate the complex legal environment and protect its members.
Together with its STORM partners, 1inch DAO becomes the first autonomous organization in the broader cryptocurrency ecosystem with access to expert guidance on compliance, governance, and legal defense. This groundbreaking move ensures that the DAO will receive expert legal advice.
Accordingly, they will strive to operate within the scope of applicable laws and regulations in the United States and elsewhere.
This move is especially noteworthy given recent concerns from the U.S. Securities and Exchange Commission (SEC) about the cryptocurrency industry and DeFi sector. In the lawsuit, the agency noted that individuals engaging in illegal activity, including offering unregistered securities through the DAO, could be sued individually.
For example, after the SEC’s lawsuit, BarnBridge DAO agreed It halts sales of what the agency says are “unregistered securities.” As part of the settlement, the DAO and its two founders, Tyler Ward and Troy Murray, agreed to pay $1.7 million in damages.
Lawsuits have devastated DAOs in the past.
1inch DAO has brought on board legal counsel to actively address these issues. It also aims to protect community members from undermining the law.
The DAO said the decision was “an intentional effort to strike a balance between preserving decentralization and addressing operational issues.” Through STORM partners, the DAO will have a framework in place and legal support to pave the way for others to follow.
This decision took into account the negative impact of litigation by government agencies such as the SEC. In June 2023, U.S. District Judge William H. Orrick rule In support of the U.S. Commodity Futures Trading Commission (CFTC), Ooki DAO has agreed to issue unregistered products.
1inchDAO’s new legal partner, STORM, hinted at how it intends to protect its services and the company, saying in a statement:
Our team will specifically address cross-jurisdictional compliance, contractual agreements, DAO governance framework, member liability, legal personality, asset protection, intellectual property rights, rights enforcement, and defense against external claims. Our legal representation, based on a community-led mandate, is intended to ensure the stability, efficiency, and longevity of the DAO.
Additionally, by engaging legal counsel, the community aims to protect the decentralization of the DAO while maintaining “regulatory compliance.” It is not yet known whether other DAOs will follow suit and vote to elect legal representatives for their communities.
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